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Zipcar Reports 2012 Third Quarter Results



Zipcar Reports 2012 Third Quarter Results

  -- Revenue of $78.2 Million; Adjusted EBITDA of $6.5 Million; US GAAP Net
            Income of $4.3 Million, or $0.10 per Diluted Share --

CAMBRIDGE, Mass., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Zipcar, Inc. (Nasdaq:ZIP),
the world's leading car sharing network, today reported results for the third
quarter ended September 30, 2012.

Recent Highlights

  * Third quarter revenue increased 15% to $78.2 million compared to $68.1
    million in the prior year period
  * Total members grew 18% from the prior year period to over 767,000 at
    quarter end
  * Third quarter adjusted EBITDA of $6.5 million compared to $4.6 million in
    the prior year period
  * Third quarter US GAAP net income of $4.3 million, or $0.10 per diluted
    share, compared to net income of $651,000, or $0.02 per diluted share in
    the prior year period
  * Launched Miami as 20^th major metro market
  * Surpassed the 300 mark of campuses participating in the Zipcar for
    University program
  * Continued European expansion with completion of the integration of
    Barcelona-based Avancar, Spain's largest car sharing service, and the
    acquisition of Carsharing.at, a leading Austrian car sharing network
  * Launched Zipvan service in Seattle, Los Angeles, Philadelphia and
    Portland, Oregon

"With our strong results in the quarter, we have raised our full-year guidance
and we are on track to deliver 2012 as Zipcar's first full year of
profitability on a US GAAP basis. This is an exciting milestone for our
company," commented Scott Griffith, Chairman and CEO. "We expanded our global
leadership position by integrating our operations in Barcelona and by
acquiring a leading car sharing provider in Austria. Additionally, we have
strengthened our technology edge with the successful launch of a new platform
and have enhanced both our membership marketing programs and offerings,
including a further rollout of our Zipvan cargo van service that is expected
to be available in all of our major North American markets in 2013."

Summary Results

For the 2012 third quarter, revenue increased 15% to $78.2 million compared to
$68.1 million in the prior year period. Revenue growth in the 2012 third
quarter resulted primarily from an 18% increase in membership to over 767,000
members at quarter end. Usage revenue per vehicle per day was unchanged at $65
versus the prior year period. Usage revenue represented $66.9 million in the
third quarter of 2012, compared to $58.8 million in the prior year period with
fee revenue representing substantially all of the remaining revenue in both
periods. Fee revenue represented 14.3% of total revenue in the 2012 third
quarter compared to 13.6% in the prior year period.

In Zipcar's Established Markets – Boston, New York, Washington, D.C. and San
Francisco – third quarter revenue grew 15% to $45.0 million compared to $39.3
million in the prior year period due primarily to new member additions. Income
before tax for the Established Markets increased to 29% of revenue in the
third quarter of 2012 compared to 23% in the prior year period.

Third quarter US GAAP net income increased to $4.3 million, or $0.10 per
diluted share, which includes the positive impact of $1.7 million on sale of
Zero Emission Vehicle (ZEV) credits, compared to net income of $651,000, or
$0.02 per diluted share in the prior year period.

Non-GAAP Results

Adjusted EBITDA for the 2012 third quarter increased to $6.5 million, which
excludes the aforementioned $1.7 million in ZEV credits, compared to $4.6
million in the prior year period as a result of revenue growth and operating
leverage.

"Our results reflect another quarter of solid revenue growth and increased
profitability," commented Ed Goldfinger, Chief Financial Officer. "The margin
expansion we reported reflects continued operational efficiencies as well as
the positive impact of the transition of our domestic fleet to lower cost ABS
financing which has progressed ahead of plan for the year."

Outlook

For the 2012 fourth quarter, Zipcar expects revenue in the range of $67
million to $71 million. Adjusted EBITDA for the period is expected to range
from $4.5 million to $7.5 million and US GAAP net income is expected to range
from break-even to $3.0 million. For the full year 2012, revenue is expected
in the range of $275 million to $279 million. Full year 2012 adjusted EBITDA
is expected to range from $14.5 million to $17.5 million and US GAAP net
income is expected to range from $1.0 million to $4.0 million. The above
guidance incorporates the estimated impact from Hurricane Sandy with respect
to lost revenue, vehicle damage and increased operating costs. Zipcar's
average share count is expected to be approximately 40 million shares for the
fourth quarter and full year. Common stock equivalents of approximately 1.5
million shares would be included to the extent Zipcar records positive US GAAP
net income.

Conference Call, Webcast, and Slide Presentation

Zipcar will host a conference call today at 4:30 pm Eastern Time to discuss
its 2012 third quarter results and financial outlook. To access the conference
call, please dial 877-407-8029 (U.S.) or 201-689-8029 (international)
approximately 10 minutes prior to the start of the call. The conference call
will also be available via live webcast under the investor relations section
of Zipcar's website at http://ir.zipcar.com.

If you are unable to listen to the live conference call, a replay will be
available through November 15, 2012, and can be accessed by dialing
877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted
for replay conference ID number 401516#. An archived version of the webcast
will also be available under the investor relations section of Zipcar's
website at http://ir.zipcar.com.

About Zipcar

Zipcar is the world's leading car sharing network with more than 767,000
members and 10,000 vehicles in urban areas and college campuses throughout the
United States, Canada, the United Kingdom, Spain and Austria. Zipcar offers
more than 30 makes and models of self-service vehicles by the hour or day to
residents and businesses looking for an alternative to the high costs and
hassles of owning a car. More information is available at www.zipcar.com.

Zipcar and the Zipcar logo are trademarks of Zipcar, Inc.  Other company and
product names may be trademarks of their respective owners.

Non-GAAP Financial Measures

This press release contains the non-GAAP financial measure of Adjusted
EBITDA. Zipcar, Inc., or the Company, defines Adjusted EBITDA as earnings
before non-vehicle depreciation, non-vehicle interest expense, interest
income, amortization, preferred stock warrant liability adjustment, stock
compensation expenses, acquisition and integration costs, taxes, loss of
equity-method investee, other income related to Zero Emission Vehicle credits
and other gains or losses associated with events of a non-recurring
nature. The Company believes that this non-GAAP measure is an important
measure of its operating performance because it allows management, investors
and analysts to evaluate and assess the Company's core operating results from
period to period after removing the impact of changes in the Company's capital
structure, income tax status and method of vehicle financing, and other items
of a non-operational nature that affect comparability. The Company includes
vehicle-related depreciation and interest in its definition of Adjusted EBITDA
because vehicles represent core operating assets used in the delivery of the
Company's service that require periodic replacement. In addition, the
exclusion of these costs would result in a lack of comparability in the
treatment of vehicles that are owned or leased under capital leases and those
leased under operating leases. The Company believes that various forms of the
Adjusted EBITDA metric are often used by analysts, investors and other
interested parties to evaluate companies such as Zipcar for the reasons
discussed above. Adjusted EBITDA is also used for planning purposes and in
presentations to the Company's board of directors as well as in the Company's
annual incentive compensation program for senior management. 

The Company does not consider the non-GAAP measure of Adjusted EBITDA in
isolation or as an alternative to financial measures determined in accordance
with GAAP. The principal limitation of Adjusted EBITDA is that it excludes
significant elements that are required by GAAP to be recorded in the Company's
financial statements. In addition, it is subject to inherent limitations as it
reflects the exercise of judgments by management in determining how it is
formulated. In order to compensate for these limitations, management of the
Company presents this non-GAAP financial measure in connection with its GAAP
results. The Company urges investors to review the reconciliation of this
non-GAAP financial measure to the comparable GAAP financial measures included
in this press release, and not to rely on any single financial measure to
evaluate the Company's business. Reconciliation tables of the most comparable
GAAP financial measure to the non-GAAP measure used in this press release are
included in this release.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995, including but not limited to statements regarding the Company's
continued rollout of its Zipvan service and the Company's financial guidance
for the fourth quarter of 2012 and for the full year 2012. These
forward-looking statements are made as of the date they were first issued and
were based on current expectations, estimates, forecasts and projections as
well as the beliefs and assumptions of management. Words such as "expect,"
"anticipate," "should," "believe," "hope," "target," "project," "goals,"
"estimate," "potential," "predict," "may," "will," "might," "could," "intend,"
variations of these terms or the negative of these terms and similar
expressions are intended to identify these forward-looking statements.
Forward-looking statements are subject to a number of risks and uncertainties,
many of which involve factors or circumstances that are beyond the Company's
control. The Company's actual results could differ materially from those
stated or implied in forward-looking statements due to a number of factors,
including but not limited to the Company's ability to profitably attract new
members and retain existing customers, adverse economic conditions in general
and adverse economic conditions specifically affecting the markets in which
the Company operates or may operate, the Company's ability to continue to
promote and maintain its brand in a cost-effective manner, the Company's
ability to manage growth, the Company's ability to successfully expand its
business internationally, and other risks detailed in the Company's publicly
available filings with the Securities and Exchange Commission, which are
available on www.sec.gov. Past performance is not necessarily indicative of
future results. The forward-looking statements included in this press release
represent the Company's views as of the date of this press release. The
Company anticipates that subsequent events and developments will cause its
views to change. The Company undertakes no intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. These forward-looking statements
should not be relied upon as representing the Company's views as of any date
subsequent to the date of this press release.

ZIP-F

Contacts:
Investor Relations:
Jonathan Schaffer or Mandy Cheuk, The Blueshirt Group
Phone: 212-871-3953 (Jonathan) or 212-331-8430 (Mandy)
Email: ir@zipcar.com
 
Media Relations:
Karen CK Drake, Vice President of Communications, Zipcar
Phone: 617-336-4323
Email: pr@zipcar.com

 
Zipcar, Inc
Condensed Consolidated Statements of Operations
(Unaudited)
                                                                                     
                                                Three Months Ended      Nine Months Ended
                                                September 30,           September 30,
                                                2012        2011        2012        2011
(in thousands, except share and per share data)                                      
                                                                                     
Revenue                                         $ 78,232    $ 68,059    $ 208,174   $ 178,751
Cost and expenses                                                                    
Fleet operations                                45,814      43,365      129,472     118,856
Member services and fulfillment (1)             5,515       5,543       14,770      14,681
Research and development (1)                    1,279       1,083       3,271       3,055
Selling, general and administrative (1)         20,540      15,803      55,350      43,213
Amortization of acquired intangible assets      742         956         2,381       3,023
Total operating expenses                        73,890      66,750      205,244     182,828
Income (loss) from operations                   4,342       1,309       2,930       (4,077)
Other income (expense)                                                               
Interest income                                 95          45          248         65
Interest expense                                (1,244)     (810)       (3,239)     (7,795)
Other, net                                      1,017       (186)       576         528
Income (loss) before income taxes               4,210       358         515         (11,279)
(Benefit) provision for income taxes            1           (304)       (56)        (264)
Net income (loss)                               4,209       662         571         (11,015)
Less: net (income) loss attributable to         111         (11)        279         1
redeemable noncontrolling interest
Net income (loss) attributable to Zipcar, Inc.   $ 4,320     $ 651       $ 850       $ (11,014)
                                                                                     
Net income (loss) attributable to common                                             
stockholders per share:
Basic                                            $ 0.11      $ 0.02      $ 0.02      $ (0.42)
Diluted                                          $ 0.10      $ 0.02      $ 0.02      $ (0.42)
Weighted average number of common shares                                             
outstanding used in 
computing per share amounts:                                                         
Basic                                            39,961,460  38,904,375  39,784,986  26,039,538
Diluted                                          41,434,740  42,479,718  41,737,033  26,039,538
                                                                                     
(1) Stock-based compensation is included in                                          
above line items
                                                                                     
                                                                                     
                                                Three Months Ended      Nine Months Ended
                                                September 30,           September 30,
                                                2012        2011        2012        2011
                                                                                     
                                                                                     
Member services and fulfillment                 $ 54        $ 20        $ 151       $ 69
Research and development                        66          39          156         120
Selling, general, and administrative            1,412       1,056       3,887       2,880
                                                $ 1,532     $ 1,115     $ 4,194     $ 3,069
                                                                                     

                                                      
                          For the Three Months Ended For the Nine Months Ended
                          September 30,              September 30,
                          2012          2011         2012        2011
                          (in thousands)
Reconciliation of                                                 
Adjusted EBITDA
Net income (loss)
attributable to Zipcar,   $ 4,320       $ 651        $ 850       $ (11,014)
Inc.
Stock compensation        1,532         1,115        4,194       3,069
Amortization              742           956          2,381       3,023
Non-vehicle depreciation  872           615          2,173       1,781
Acquisition and           438           1,548        1,539       3,537
integration cost
Loss of equity-method     389           --           701         --
investee
Non-vehicle interest      37            31           101         5,068
expense
Interest income           (95)          (45)         (248)       (65)
Taxes                     1             (304)        (56)        (264)
Preferred stock warrant   --             --           --          724
liability adjustment
Zero Emission Vehicle     (1,732)        --           (1,732)     (861)
credits
Adjusted EBITDA            $ 6,504       $ 4,567      $ 9,903     $ 4,998

 
 
Zipcar, Inc
Condensed Consolidated Balance Sheets
(Unaudited)
                                                                      
                                                           September December
                                                           30, 2012  31, 2011
(in thousands, except share and per share data)                       
                                                                      
Assets                                                                
Current assets                                                        
Cash and cash equivalents                                  $ 43,380  $ 61,658
Short-term marketable securities                           21,511    24,788
Accounts receivable, net of allowance for doubtful         9,510     7,452
accounts
Restricted cash                                            9,235     381
Prepaid expenses and other current assets                  15,127    13,665
Total current assets                                       98,763    107,944
Long-term marketable securities                            17,547    13,809
Property and equipment, net                                175,839   103,789
Goodwill                                                   107,430   99,696
Intangible assets                                          3,561     4,754
Restricted cash                                            10,082    7,277
Deposits and other noncurrent assets                       16,414    7,269
Total assets                                               $ 429,636 $ 344,538
Liabilities and Equity                                                
Current liabilities                                                   
Accounts payable                                           $ 7,161   $ 6,069
Accrued expenses                                           27,207    20,003
Deferred revenue                                           23,359    19,369
Current portion of capital lease obligations and other     18,097    11,367
debt
Total current liabilities                                  75,824    56,808
Capital lease obligations and other debt, net of current   115,372   58,908
portion
Deferred revenue, net of current portion                   4,988     4,659
Other liabilities                                          484       2,313
Total liabilities                                          196,668   122,688
                                                                      
Commitments and contingencies                                         
                                                                      
Non-controlling interest                                   1,248     400
Stockholders' equity:                                                 
Common stock, $0.001 par value                             40        40
Additional paid-in capital                                 300,632   294,107
Accumulated deficit                                        (71,801)  (72,651)
Accumulated other comprehensive (loss) gain                2,849     (46)
Total stockholders' equity                                 231,720   221,450
Total liabilities and equity                               $ 429,636 $ 344,538

 
 
Zipcar, Inc
Key financial and operating metrics
(Unaudited)
                                                                   
                          For the Three Months Ended For the Nine Months Ended
                          September 30,              September 30, 
                          2012          2011         2012         2011
Key Financial and Operating Metrics:                               
Ending members             767,481       649,627      767,481      649,627
Ending vehicles            10,645        9,489        10,645       9,489
Usage revenue per vehicle  $ 65          $ 65         $ 63         $ 62
per day
Total revenue per member   $ 103         $ 108        $ 286        $ 298
per period
Cost per new account       $ 70          $ 55         $ 77         $ 59
Average monthly member    97.3%         97.3%        97.7%        97.8%
retention
Adjusted EBITDA (in        $ 6,504       $ 4,567      $ 9,903      $ 4,998
thousands)
                                                                   
                                                                   
                          For the Three Months Ended For the Nine Months Ended
                          September 30,              September 30,
                          2012          2011         2012         2011
                                                                   
                                                                   
Established Markets:                                               
 Ending members            391,422       340,814      391,422      340,814
 Ending vehicles           5,495         5,006        5,495        5,006
 Usage revenue per         $ 70          $ 70         $ 69         $ 68
vehicle per day
 Revenue (in thousands)    $ 45,016      $ 39,313     $ 117,565    $ 100,831
 Income before tax (in     $ 13,005      $ 9,061      $ 28,496     $ 21,081
thousands)
                                                                   
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